tv Closing Bell CNBC July 26, 2013 3:00pm-4:01pm EDT
selling homes, we're always doing the basics, the fundamentals, and then the homeowner can add to that if they want. so you want a system that's expandible. so lay down the foundation, give them the concept, and they can add to it later. >> guys, you a sum stuff. great tips. thank you very much. we'll see you soon. take care. >> thanks for having us. >> have a great weekend. "closing bell" starts right now. hi, everybody, happy friday to you. welcome to the "closing bell." coming to outside the new york stock exchange for our summer on the street series. things inside heating up after being down about 140 points earlier today, bill. >> yeah. gorgeous day out there, i know, maria. and inside, getting a little better. the outlook, the dow was down about 140 points at its low. we're well off those lows right now. and all of this as -- i mean, who knows why we saw the sell-off this morning.
we'll talk about it over the coming hour here. we had the best consumer sentiment survey in six years this morning, and the market sold off. around the earnings have not been all that bad. so we have a lot to talk about coming up this hour here. >> yeah, and we're certainly coming off of the lows right now as we approach the final stretch. the market also keeping a close eye onto drama in d.c. over the federal reserve. who will be the next chairman after bernanke? so much so today, the white house tried to calm things down by saying, no decision has been made. no decision is imminent. but the larry summers rumors are invoking a lot of reaction. we'll get the very latest from washington and analysis from our own steve liesman and rick santelli on the next chairman. meanwhile, more developments in the government versus steve cohen's hedge fund s.a.c. capital, who not only wants to shutter the firm, but it's trying to get all of the money, as well, possibly leaving cohen penniless. what's behind the move, the outcome could have long-reaching
consequences. we'll deal with that. >> such an extraordinary story we're on top of. we'll bring you the latest. let's look at the markets. for the week, we have weakness going on. the dow jones industrials average down about 37 points. look at that chart. having bounced off of the lows, which were reaching about 11:00 a.m. this morning. and looking very close right now to inching back to the highs of the day. down 37 points at 15,518 on the dow jones industrials average. nasdaq looks like this. similar chart pattern in terms of the bounce. bouncing off of the lows on the nasdaq, as you can see. we are positive here, just turning positive on the nasdaq, by a fraction at 3,605. last trade there. and the stand & poors index, the similar chart pattern, looking intraday, where the bounce happens about the same time. we're very close to even on the standard & poor's right now, bill. >> yeah. and then you factor in the nasdaq, which is having its best week -- or best month in about a year and a half.
the russell 2000, bob pisani, having the best month in almost two years here. >> right. small caps are leading. that's a sign the u.s. is still the place to be, even though there's talk about europe bottoming and maybe getting back into emerging markets. let's look at the trading action today, folks. and we had a little problem earlier on, weakness in japan weighed on the u.s. didn't like the inflation numbers, the yen went up. that's always bad. the commodities were weak on china concerns, and some talk about china order commodities to cut production. all of the material stocks were down. and around 11:00, maria right, the market dropped. a comment from the imf essentially scolding the federal reserve saying if you're not careful communicating better, improving your transparency, you're going to cause another rise in interest rates. essentially, scolding the fed. that kind of dropped the market, because they warned we could have a rise in rates. low volumes in the markets, and that's a factor. two historic highs on earnings. great numbers from starbucks. hope you all saw howard on "squawk on the street" this
morning, expanding the products overseas. expanding innovation here in the united states. absolutely ten. we're talk ing about comps up. black & decker had good numbers. the do-it-yourself segment is strong. a sign that housing and the home improvement market is strong. here we are, folks, in terms of earnings. we're halfway through. the important thing is, we're looking okay for the third quarter. 5.1% rise in earnings expectations for the third quarter. only at 6% going into it. they're not dropping it much. companies are basically promising things will get better. who knows whether that will happen? here we are on the week so far, still on the downside. i do want to note transportation stocks really hurt here. most of the week we've had a lot of the railroads to the weak side. bill and maria, back to you. >> all right, bob, thank you very much. we're in this last hour of trading for the week. markets coming off the morning low, down just 37 on the dow right now. our "closing bell exchange" welcoming jerry from oppenheimer and rich peterson from s s&p
capital, and enjoying the lovely day. jerry, we've noticed -- >> beautiful. >> isn't this great? good for you guys. we've noticed in the earnings reports once again for another quarter, jerry, good on the bottom line, but what we're calling a revenue recession. why are revenues so light again, do you think? >> you know, it's really hard to know. i mean, everybody says margins can't be sustained where they've been, where we keep doing better on efficiency, but we're not seeing a lot of top-line growth. i think the consumer confidence number, i think, helps us. household wealth being a little bit better with the housing market. going into the third and fourth quarter, i think we'll see a pickup in revenue. but clearly, consumers have been conservative, and especially businesses have been very careful about capital investment and about hiring, and that's, i think, ckept revenues down even as businesses are making good money. >> what will it take, rich, to
move the needle on that? jerry makes the right point. we're seeing earnings growth, but revenue is in decline. >> with regard to revenue, it's not a new phenomenon. we've been experiencing it since the fourth quarter of 2011. last year, we had 4% revenue growth, this year only 2%. the other story is about earnings. the fact that alcoa reported back on april 8th, expectations for less than 3%. now at 4.5%. however, if you strip out the financials, the numbers have come down. ex-financials, down less than 1%, .8%. >> so it's all financials? >> a combination from the fed. in fact, seven of the ten s&p 500 sectors have seen declines in expectations, only discretionary, financials, have risen in terms of growth expectations from april 8th. >> yeah, rich, rich, the softness -- the softness in revenue and the better bottom lines can't go on forever. you know, there's only so much cost cutting you can do or whatever it is they're doing to improve the bottom line.
how much longer can we put up with this, rich? >> well, you know, again, i think, bill, managers are really trying to address a variety of different factors. the factors, all of the cash on the balance sheet and they don't know what to do with it. the fact is we'll see improvement in revenues going into the third and fourth quarter. those numbers may come down. (unintelligible) improve in the third and fourth quarters. however, i think it's true. you know, is it revenue recession? no, coming out of the energy/materials sector. >> look what you're saying. jerry, react to this. he's saying it's all financials. don't tell me about the quality. this is not great quality. >> well, yeah, financials have been -- have had leadership. in terms of earnings, revisions, expectations, we saw some upward revisions in industrials. it's actually an interesting contrast. we've seen some upward revisions in industrials and we've seen the upward revisions in things like utilities and consumer staples, which is really kind of
peculi peculiar. i think what's going on, in today's market action, is just a metaphor for what's going on. it used to be the friday technical, where everybody was afraid to go home long on friday. i think now everybody's afraid to go home short on friday. and that's why the market's improving. at some point, businesses are going to say what investors are saying. my competition's getting ahead of me. i've got to start hiring. i've got to start expanding. we're seeing some capital expenditure numbers, durable goods numbers were okay. i think that's the direction everybody's fearful. >> i think what will be important is next week we get the fomc meeting, the statement on wednesday. and honestly, on friday, the nonfarm payroll for july. >> and the gdp. >> right. which will be lousy. >> yeah, but it won't be very good. >> what do you think the number will be, jerry? >> it looks like it will be a percent or so, the kind of thing we're seeing. in a way, that's good news, because the weakness is heavily in inventories. this is another example of everybody's waiting, waiting, waiting for somebody else to do something. inventories are still very lean,
and they have been for the last three quarters. that suggests there's some upside potential. at some point, it can't sell from empty shelves. >> rich, you putting money into the market here? >> well, i don't -- you know, i'm just the economist. yes, i would put money into this market now. >> would you? >> we're expecting higher prices towards year's end. we're seeing improving economy. capital goods, orders are improving, homes are improving, employment is improving. that being said, earnings aren't (unintelligible), but again, it's accommodation. once the accommodation is pulled away, that's going to affect the bottom line. >> all right. we'll leave it there. gentlemen, thank you very much. >> thanks, guys. meanwhile, the story we've been covering now, s.a.c. capital is pleading not guilty to the government's insider trading charges, as the government literally goes for broke with the firm. kayla has the very latest developments right now. kayla? >> reporter: maria, it was a short hearing that went the way many expected, a swift not guilty plea on behalf of s.a.c. capital, in the face of the criminal indictment over charges
of wire and securities fraud from the u.s. attorney's office. and even though steve cohen didn't appear today, and he wasn't named personally in that indictment, the signature on that not guilty plea signed steve, from steve cohen himself. the not guilty plea pits s.a.c. against the u.s. attorney for the southern district. that's preet bharara, whose track record on pursuing these insider trading cases that go to trial, it's a 100% success rate. he's tried one other recent case against a big firm, even though it was on a smaller scale than s.a.c., but this certainly would be the most high-profile case yet given that it concerns the entirety of s.a.c. capital and all of its 950 employees. s.a.c. responded to the indictment yesterday with a statement saying, quote, the handful of men who admit they broke the law does not reflect the honesty, integrity, and character of the thousands of men and women who have worked at s.a.c. over the past 21 years. s.a.c. will continue to operate as we work through these matters. the firm will continue to operate and it seeks a protective order with the feds
in order to protect the investor assets as well as its business relationships on wall street. that could be in jeopardy. if they do move to seize some of s.a.c.'s assets. a civil suit filed separately yesterday goes after any and all assets at s.a.c. that were commingled or were associated with illegally gotten gains. bharara said those were in the hundreds of millions of dollars. but, guys, this could go into the billions if it's successful. so certainly one to watch. a 60-day period where they'll be reviewing firm communications, building a case, interviewing potential witnesses, and certainly is not the last that we're going to hear from this trial going forward. guys, back to you. >> that is extraordinary, kayla. great stuff. we're going to keep watching that. it continues to develop. i know you're on it, and we know that right now, i understand you also have news on jpmorgan, kayla. >> reporter: maria, a press release coming out moments ago saying that jpmorgan is exploring strategic alternatives for its physical commodities business. this is very interesting, considering that "the new york times" ran a story over the
weekend raising questions about the conflicts of interest some of these banks like goldman sachs, morgan stanley, and jpmorgan, that have physical warehouses that store commodities like aluminum and copper and other commodities, too. jpmorgan is now the first bank that's publicly come forward and actually said, you know what, we understand the conflict and are looking at structures to run this spinoff, a jv, or a sale. we haven't seen that from the other banks. they haven't commented at length about that story. but jpmorgan certainly moving forward and saying if it doesn't make sense for a bank to be in this business, then we will evaluate not being in this business. maria? >> yeah, once again, regulation dictating strategy there, or anticipated regulation. kayla, thank you. kayla taushy with the latest. if we wait long enough, maria, we could go positive. it would be one of the rare days if we do. the dow was down triple digits, down 140 points at the low. here we are down 17. at the high of the day, we were
down just 7. so we're headed in that direction. >> once again, bill, the market feeling like it wants to go higher. we'll ride this out going into the close. up next, fed fight. some senate democrats now urging president obama to pick janet yellen, not larry summers, to replace federal reserve chairman ben bernanke. meanwhile, the white house saying today it is not doing anything until at least the fall. up next we're taking you live to washington, and steve liesman and rick santelli will sort it out. back in a moment. and amazon shares rallying, despite earnings that some felt were disappointing. up next, why can't anything stop this stock right now, which is trying to close at another record high? both sides of the trade are coming up, maria. also, we're going to find out who is wall street's top athlete, and they are betting on the race, because all of the winnings go to fighting pediatric cancer. it's coming up on the "closing bell." back in a moment.
>> reporter: hi ya, bill. you've heard the expression trial balloon. that's what we've been seeing this week with the circulation of the possibility of lawrence summers to be named as the new fed chairman to replace ben bernanke sometime this fall, possibly. that seems like a classic case of a trial balloon the white house floating that name, trying to gauge what the reaction is. the white house, as you say, forced to come out today and announce that no decision is expected on this, of course, until the fall. and meanwhile, in response to this trial balloon, we've seen a group of senate democrats circulating a letter, they're saying they back janet yellen. she's the current vice-chairman of the federal reserve system. and a former white house insider tells me today that it feels to this former insider like lawrence summers is the pick, but the white house is waiting to see what kind of blowback they might get as a result of this pick. this insider telling me that it doesn't feel like they've gotten enough negative blowback here to dissuade them this week from nominating lawrence summers at some point this fall when it comes to it.
what's larry summers' big advantage? it's face time with the president. larry summers has been close to president obama in moments of intense crisis, including leading some of the phone calls with the presidential candidate in the financial crisis in 2008 in the lead-up to his big meeting with president bush and john mccain. lawrence summers was there at his side. janet yellen doesn't have that advantage. she was at the san francisco fed. that seems to be the big thing that's driving this advantage now for summers, but we'll have to see whether the blowback plays any role and whether think shift their tune going into the fall. bill? >> all right, eamon, stay right there, please. >> let's bring in steve and rick, to talk about the replacement. steve, why is there such divisiveness on this idea? >> you know, i think that ultimately, there are strong feelings about fed policy out there. i think that plays in it on the
one hand. i also think that people have their feelings about some of the politics of this. larry summers, perhaps seen as a much more political figure than janet yellen. janet yellen is really an economist, a monetary policy expert. and our data show that wall street overwhelmingly likes janet yellen over larry summers. >> well, i mean, rick, what's your take on larry summers as the head of the fed? >> well, i think from a resume standpoint, there's no doubt that he's qualified, and janet yellen is qualified. it doesn't surprise me that the street wants janet yellen, because they like the continuity of the programs. just look at corporate profits and the stock market. but in terms of larry summers, there's no doubt that he's the guy they want. you could call it floating balloons, but i think it's much more. everybody was hunkered down for janet yellen. this is a bit of a kabuki dance. i think they're trying to vet the negatives, and in the negatives, he has so many bags
and so much baggage, southwest would take all of the net worth of s.a.c. to get him through security. >> you know, guys, one of the negatives that the white house is looking at, and former white house insider telling me that, you know, the big question for larry summers is in terms of communications. we've seen how important communications is for the federal reserve, talking to the market, not trying to talk them up or talk them down too much. can you imagine larry summers as brusque as he has been known to be, in the role of ben bernanke, at one of the fed conferences with steve liesman asking him very tough questions? one of the questions about larry summers is would he be able to handle that without spooking the markets with a misplaced adjective somewhere, and that's an unknown at this point. >> well, what about -- [ overlapping speakers ] >> -- we've all interviewed larry summers. does a good job of spending three minutes saying nothing. and i mean that in a kind way. >> i agree with that. >> right? >> well, it certainly -- it certainly worked for alan greenspan. let's talk about policy, okay?
how is it do you think larry summers' policy would be different to bernanke's, same question on janet yellen? >> i think there's about, you know, a nanomillimeter difference between the two when it comes po policy. i know that larry has suggested that maybe qe wasn't working quite as much as it had in the past. i wouldn't see him as coming in dramatically changing the program beyond the trajectory that it's on when he takes office. i know what the president probably wants here, and he would think that any chairman he would pick would have inflation credentials. i think they would come to his desk with those kind of credentials. so the question would be, how much they care about the employment problem. bernanke has distinguished himself among those in washington of thinking it's a national crisis, and really orienting policy towards employment. he would want somebody who does that, i believe, both summers and yellen would qualify in that respect for the president. >> and i remember when alan
greenspan was appointed by ronald reagan, the fear then was that he was too much of a political animal. he'd been in the white house during the nixon and ford years, and he was the help of whip inflation now program at that time. >> bill, to that question, you know, this letter being circulated by senate democrats, a lot of whom are sort of the liberal core of senate democrats, might actually help larry summers, because it shows that the left doesn't necessarily like him. thatti that positions him as more of a centrist, and that could help in terms of getting the fed job. another area to look at in terms of distinguishing characteristic, is the issue of regulation. when you look at larry summers, he's somebody that's skeptical of the federal government's ability to regulate markets and might look more toward systemic ways to regulate markets, rules-based ways of regulating markets rather than having regulators poking and prodding a lot of the banks. that's a philosophical approach difference you might see between the two candidates. >> well, is there any worry,
though, that larry summers politicizes things, you know, given that his past jobs within the administration? you know, the federal reserve is supposed to be independent. >> stick husband. >> do you feel it continues to be independent regardless of larry summers running it versus janet yellen? >> well, first of all, maria, the position itself is time to be apolitical. whether that's the case -- i think you're right. i think there's a sense that larry being in there would be more of a political appointment. and you'll note that inside the federal reserve, as well as the last fed chairman, have all been more technicrats, and that's a trend in the treasury -- had been in the treasury and also at the federal reserve. and really a summers appointment in this regard might be counter to that trend. >> john taylor -- >> all right, everybody. >> yeah? >> john taylor. i'll tell you, john taylor, and i know steve surveys his number,
comes up high. most people that don't think that all means justify ends, then john taylor should be the man. >> thanks, gentlemen. >> okay, we have a third name. >> appreciate it. we'll see you soon. we want to get to josh lipton. he is watching this market, as the "market flash" now. >> we're watching milan, the u.s. court of appeals for the circuit saying they will use the patent for their drug. they're trying to develop a cheaper form of the drug which analysts tells me does about $3 billion a year in sales. maria, back to you. >> all right, josh, thank you so much. we're in the final stretch for the day. the final stretch for the week. we have about 30 minutes before the closing bell sounds for the day. a market is under pressure, but coming way back. >> way back. >> from the lows. just down 15 points on the dow right now. >> the bias is to the buy side now. very, very narrow at this point, i'm told by art. amazon shares have been a
bright spot today, despite missing on earnings and posting an unexpected quarterly loss. when we come back, somebody says this red-hot stock is starting to look expensive. we'll get both sides of that trade coming up. and then, after finally reporting blowout earnings, should you finally bet on facebook to move above the $38 ipo price? the trade on facebook coming up. stay with us. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection.
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can anything stop amazon? the shares of the online retailer did fall on earnings initially, but have since recovered, and are now up 2%, back to an all-time high. if you think 300 bucks a share is pricey, check out amazon's forward multiple. this is a measure of how pricey a stock is relative to other stocks in the market. and it is nearly eight times greater than the overall market. so is amazon too expensive? and what's behind this amazing run? let's start talking numbers on amazon and define -- find out what approaches you should be taking. on the technical side, abigail,
with the seaport group, and ennis is on the fundamental side. good to see you both. ennis, what do you think of amazon fundamentally now? >> well, p/e is not really the right measure to use. the reason why is -- let's talk about the positives, the stock's at an all-time high, because it's a platform story. the investors buying it are thinking am glon azon is domina. in the future, they have multiple levers to use. secondly, they're focused on digital. in fact, "wall street journal" pointed out that management in their highlight section of the earnings highlighted digital much more than the traditional online retailing business. that's a high margin area in the future if they can sell digitally. the issue for me, though, i'm not a buyer of the stock, because as much as i prefer faith over fear, to me, it's a significantly putting faith in amazon considering in the whole history they haven't delivered earnings or significant cash flow in its $150 billion cap. >> abigail, you've liked it in the past.
do you like it at these levels? >> it's hard to like amazon up here in the way i have in the past. the charts are tricky. what stands out to me the most is the likelihood of a big reversal down. when we pull up a five-year weekly chart, we see something that no amazon wants to see. it's a breached uptrend. it tells us the long-term buyers are fading, sellers are starting to step in. this appears to be happening on a long-term potential topping pattern. that pattern is so maggimassive scale, it's not worth paying attention to for the potential outcome. what's worth paying attention to is the likelihood of amazon dropping down toward its floor, somewhere between 160 and 170 the levels to watch around this possibility, 295, 265, and 246. if amazon should break any of those levels on a closing basis, investors absolutely want to start thinking about taking profits. >> all right. where would you start buying, ennis?
>> i mean, that's issue. fundamentally, i don't really know how to value the company. like i said, it's a platform story. it's a faith story. in that sense, i really wouldn't be a buyer, you know, if it was at $250 tomorrow. >> you're pulling a warren buffett on us. if you don't understand the company, you won't buy it. >> exactly. >> all right. i like it both. thank you, both. appreciate it. >> thank you. >> okay. well, we're in the final stretch of the week. we have a market -- >> maria? >> -- yes, bill, coming back here. the dow jones industrials average is down 20 points. the nasdaq is positive, having reversed earlier losses. and gold went positive, so maybe that's helping this as well, at some point. we're now halfway through an earnings season that's been driving the stock market. when we come back, we'll break down the earnings scorecard, try to forecast how the market will react to the next leg of earnings coming up. and then, why is the government actually trying to make s.a.c. capital, steve cohen, penniless? a closer look at the extraordinary lengths the feds are going to and what may be
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welcome back. we are about a halfway through the second-quarters earnings season, so where do we stand? let's do that right now, bill. >> let's do it. seema looks at one notable trend, and courtney breaks down the ongoing cash hoard. seema, you first. >> reporter: bill, what's noticeable about the quarter is it's not the usual names beating expectations and delivering strong earnings growth. these companies are toing the consensus for the first time in three quarters. when you look at the standouts in terms of earnings growth, once again, not the names we're used to seeing. sandis reporting a 476% jump this quarter versus 79% contraction during the same quarter last year. similar story for safeway, eli lilly, and international paper. another bright spot, micron technologies witnessing its first profitable quarter in over a year. so what is it about the second quarter that has helped these companies stage a turnaround?
digging through the earnings reports and speaking to some analysts, there seems to be a couple of factors. first, u.s. revenues are noticeably higher thanks to an improving economy. add to that efficient cost-cutting measures and lower raw material costs. all of these factor is have pusd up estimates. they're forecasting 12% rise in earnings in the last quarter of 2013. maria, we haven't seen 12% growth in earnings since 2011. >> that's pretty amazing. 2011. and that's where we're all waiting for, corporate cash, meanwhile, continues to pile up, the hoards are likely to hit another record high. courtney reagan on that angle of the earnings season. >> reporter: maria, cash isn't a bad thing to hoard, right, an uncertainty seems to be incentivizing the corporations. so for s&p 500, total cash and equivalents are at an all-time high, $930 billion. as of yesterday, $24 billion more than the same time last
year. breaking down the cash hoarding by sectors, technology, typically the highest holder of cash, actually moves to number two, behind industrials. why? well, many think it's a reflection of the lack of profitable opportunities in the industrial space or a protective move in anticipation of uncertain times ahead, waiting on more decisiveness out of the fed, congress, interest rates, et cetera. still, apple by far and away has the most cash on hand at $145 billion, followed by microsoft and google. but cash makes up more than 72% of total assets for midcap names like linear technology and headline making intuitive surgical. that's interesting. investors, too, are holding onto cash, pulling money out of the bonds but not necessarily piling it back in to equities. it's certainly good for corporate and personal balance sheets to have some cash in those proverbial piggy banks to be used later for capital expend touches, m&a, whatever the case
may be, but it's the duty of the corporations to put the cash to work and the most profitable way for investors. buybacks and dividends have increased over recent months, but really only slightly. bill? >> all right, courtney, thank you. so earnings have helped this market more than hurting it. we know that. but will that be the case as the next batch of earnings comes out in the next week or so? >> joining us right now to talk more about that is jeff cox, cnbc.com, along with matt chesslock from virtue financial. matt, let me kick this off with you. you've been in the exchange, watching the flow all day. first of all, comment on the market comeback before we get into the weeds in terms of earnings. what's going on here? >> very strong. especially after we came out of japan, really low. sunk us early in the morning. we had amazon down premarket, a big factor. that's had a nice turnaround, and the market's co-insighted with that. >> isn't that sort of the story of the market, what we saw with amazon? the demand at the end of the day is there.
>> yeah, at aunt all-time high for them to miss, reported loss of earnings per share, but they've gone on record saying earnings per share don't matter. we'll spend our money. we'll spend to penetrate the best market we can. they've used their cash flow. and their cash hoard we talked about, they've used it wisely to make a bigger global footprint, and it's working out for them at an all-time high, at over $300 a share. >> that's been jeff's message all along, all these years. jeff, earnings do beat expectations, but we do talk about that softness in revenue that's been a story for a while. >> yeah, and, of course, revenue has been better than expected. earnings were better than expected. i thought all along this was going to be a company-specific earnings season where we're just kind of looking at quality of earnings. we know the banking analysts, dick, he put out an analysis this week that was very interesting. he loves the banks, buy them, but don't back up the truck and buy them all. because a lot of the baempgs so far -- banks have made their
bones on sort of non-core earnings, the kind of one-time-off sff sort of thing, things that banks do on a daily basis. that's very important. a quick comment about the market movement. i think we're seeing the springtime trade that we had where the selling pressure comes in early from the people looking to take profits, and then as we get later into the day, we start to see the shorts come in, and now they're trying to cover and find some bargains. i think that's really a very simple trade right now. >> you know, it's funny, because it used to be someone made the remark earlier you didn't want to be long going into the weekend. now you don't want to be short going into the weekends. >> yeah, a different dichotomy now. it's interesting. because the market is so volatile. you see the little volumes we've had, over 300 million shares. so the market can be very volatile in one direction, and we saw that all afternoon. so maybe it is a little bit of short covering. i certainly wouldn't go into this market long or short overnight. >> what do you mean by that? >> why take any risks? when you can come out and buy a
stock like amazon, down $9, and get a 17-point move intraday, why take a shot at night? why will you try to buck the trend? it's easier to play the intraday, play the moves, play the technical analysis there, and, you know, this whole market, we've traded sideways over the last little bit, of the earnings season. while 68% of the numbers have been beaten, the market hasn't responded accordingly. >> makes sense. matt, thank you. jeff, thank you, as well. >> thanks, guys. >> we'll see you soon. we're in the final stretch. about 10 minutes before the closing bell sounds. and for the week, we have a market that's come all the way back, down 10 points on the dow. having come back from a 140-point sell-off earlier. >> yeah. we could do this. we have 20 minutes left. stocks in the red, but well off the lows. when we come back, bob weighs in on the fears that this bull market is starting to look a bit tired here. >> yeah. and then, traders are not just betting on stocks. they're also betting on who is wall street's best athlete. the competition is coming up, again, and you can place your bets, too, all in the name of a
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weekly loss of the month. but, man, are we off of the worst levels of the session. we're almost at flat. bob pisani here with me. we've got a big crowd today. hello! hi. happy friday to you! >> watching us on the air. >> tell me, bob, what the he is going on with this market? the market does not want to go down. >> well, there's a little bit of a pause. we're exactly halfway through. the market kind of lost a little steam whether kit pillar came out wednesday morning and lowered the guidance. most companies are not lowering their guidance. most companies are saying we'll do better in the second half, we promise you. whether it's the old promises, who knows? we lost some steam on that. today, some problems with japan, with china. anytime that happens, you have commodity stocks drop. look, we're just a percentage or so off the historic highs we've had. earnings are still okay by and large. you see the numbers for starbucks we had today. >> oh, blowout. >> my heavens, and we had howard on earlier. 9% comparable store growth. all around the world. china is growing fast, just
knocked it out of the cover, historic high for starbuck, historic high for stanley works, the do-it-yourself home improvement market is doing wellwell. two stocks at historic highs. we're okay on earnings, not great. the important thing is the third quarter is not coming down that much. the overall numbers aren't coming down. >> i'm only worried about revenue. we've got these best athlete contenders behind us. >> hunky guys is the better word for it. >> doing the rbc decathlon segment. who is the best athlete on wall street? >> okay, who do we have? >> well, you -- you tell us. you guys are not miked. >> come on up. >> greg with lord abbett. >> and peter from pimco. >> pimco? does larry know you're here in. >> just keep this quiet, bob. >> what are you going to do this in. >> go ahead, let's try it. >> okay, guy, let's see what we're doing here. wait. don't go so far. whew! >> good catch. >> and a better throw. a better throw. >> thank you.
>> this girl threw in yankees stadium. remember that. >> all right, some guns. thank you, bob. we'll come back and talk more about the best athlete on wall street. bill. meanwhile, we're watching this market as we approach the close. >> my vote for best athlete on wall street is you. you know how many miles this girl rides her bike in central park? it's a lot. anyway, we're down ten points heading toward the close right now, with about 13 minutes left in the trading session. and we'll take a break, right, and do -- brian bell sbellski s should be buying on 9 dip. we i says we're entering phase two of the bull market and what's it like touring with 9 rolling stones? the stones' old saxophone player joins us later. but not before taking us to break with some very sweet sounds.
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the dow was down about 11 points right now, but we are looking at a market that has completely reversed course from the lows, bill. >> and if i look a little distracted, folks, you know, phil mickelson is in the house. and he could be walking by here any minute now. so trust me, i'm paying attention, because with us to talk about where the market goes from here, is brian from bemo capital markets and david from morgan stanley wealth management, outside there. and he'll be singing sympathy for the devil a little bit later on the program, as well, today. aren't you, david? >> i'm going to sing upon command, bill. >> yes, we look that. brian, you think we're entering the next phase of this bull market. what does that mean? where do we go from here? >> well, it mean, bill, we really need to see fundamentals kick in. the first phase of the bull market typically, when you see a big secular bull market, as we've been calling for the last several years, 15, 20 year, you see the reactionary phase of high correlations, low vix,
things we've seen -- overindexing per se. now we need to see the transition from the reactionary investing to actual acceptance of the bull market, bill, where we see substantive inflows. we need to see it to head higher. we think the market at the current levels needs a breather but longer-term equities look promising here in the u.s. >> yeah, you know, david, some people believe that the fact that the russell 2000 index is also doing well, small-cap stocks, that that basically confirms that this is a long-term secular market. how do you feel about what we're seeing there? >> great point, maria. you have the transportation stocks, the bank stocks, and the russell 2000. those are the canaries in the coal mines. those are the lead indicators. the fact they're outperforming the s&p 500 is a good indication. no question about did. the industrials, a lot of the consumer discretionary names have been moving up very, very sharply, very nicely. the one thing we would point
out, the bull market without a 20% correction, has lasted 1,598 days, which makes this the fifth-longest bull market history. so i would love brian and his work, but i think we could have a little bit of a pause here. be careful in august. august is the russian debt default. august is saddam hussein invading kuwait. august can be a stumble month. so we -- >> you think it's a quiet, sleepy month but -- >> anybody that's got kids, you tell the kids to go upstairs and play while you get ready for dinner, and you don't hear any sound up there, it's not a good sign, maria. >> it's not a good sign. what about that, brian? what do you think? >> we're in 100% agreement. the market now is already fully priced in terms of our models, and i can't say anything different, folks, because our target for year end is 1,650. it seems that, you know, analysts and strategists are raising the numbers as the market goes higher, and on a near-term basis we think that's a bit of a trap, because they're chasing stocks higher. keep in mind, we have not yet seen substantive inflows into
equity numbers, number one, and the inflows we are seeing from etfs, and look at the trading volume. we need to see real volume on the stock exchange until we see really, really structured anticipation, in part participation, in equity markets. remember, markets and stocks are not linear for long. they don't go straight up for lounge, they don't go straight down for long. we need a bit of a breather from now until year end. >> well, it's interesting that you mentioned the volume, because we question that a lot, actually, brian. you just don't see the volume. what is that a function of? is that because the retail investor has left the party? or is it something else? >> absolutely, positively. we have not seen the great rotation. now it's in from cash into equities. we've seen a bit of rotation out of bond funds into cash. now, the next move is into equities. but clearly, we have not seen the type of inflows into equity funds, and i keep telling clients that have not been through bull markets before, like in the '80s and '90s, fun to be an equity investor, fun to
be a portfolio manager, we're not seeing that. we won't see volume in the stock exchanges until we see consistent inflows back into tra tri traditional mutual fund. >> and september is where the rubber meets the road, in germany, mexico, and japan. that's the key as to whether the market can lift from here. >> all right. you'll be back later on on "closing bell." bill, back to you. >> he'll sing "give me shelter," too. we're coming back with the closing countdown. . phil mickelson ringing the closing bell. >> all right. and after that, british open victory. and after the bell, will stack make a comeback next week? find out what's on tap that could move the money next week? [ male announcer ] this is the age of knowing what you're made of. why let erectile dysfunction get in your way? talk to your doctor about viagra. ask if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help
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who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade. two minutes left in the trading session. we might turn positive here. the s&p has just turned positive. nasdaq has been -- the dow was down 150 at the low today. this is this week, for the dow, with all of the earnings and all of the fed speak and all of the things that have been happening this week, when all is said and done, we'll finish about even for the week here. so we're down about five points. the yield on the 10-year, another very volatile week. we got to a peak of 3.63 or so. we had the one day where we had the 13-point basis point. we've come off of that. back to 2.55 now.
ben willis, do you want to be long or short ghing into the weekend here? what's going on here? >> you never want to short a dull taper, but my sense is to short. there's no tea leaves to read. no volume on the equity side. there seems to be an underlying bid from the money flowing into the equities. not very aggressive money, but money coming in all the same. dangerous trade. i'd like to stay flat. if you made me for a customer i'd be short, for myself, i'd stay away. >> how important is the -- are interest rates now as they continue higher, the yield on the 10-year is still creeping up. >> it's important to equities, because as that goes higher, it means the value of the bond holdings goes down, and it will force more people into the equity market. >> and next week, more earnings a, two-day fed meeting, we have bond -- >> cpi, pmi. and the big daddy is on friday with the jobs numbers. so that will carry the day. hopefully, that will bring volume and people off the sidelines. >> all right. thank you, ben. appreciate it. we're going to go out and look at that, we are finishing the
day positive. one of those rare sessions where the dow was down 150 and comes all the way back. [ bell ringing ] phil mickelson, part of the mickelson-exxon teaching academy, ringing the closing bell. that's it for the first hour. stay tuned for "summer on the street" the second hour with maria bartiromo. have a good weekend. and itst 4:00 on wall street. do you know where your money is? hi, everybody, welcome back to the "closing bell." i'm maria bartiromo coming from outside the new york stock exchange this friday afternoon. a major reversal on the street today. the dow rallies back from 150-point deficit to finish positive. look at how we finish the day on the street with the dow up a fraction. but what a wild ride coming off of the low of down 150 earlier, about 11:00 a.m. this morning. the nasdaq positive with a gain on the session of about